A diagram that sets out all the options available when making a decision
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Aims of decision trees?
To reduce uncertainty or measure the degree of uncertainty
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What do decision trees measure?
The degree of uncertainty
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Give 2 advantages of using decision trees
Encourages logical approach, considers all possibilities, takes risk into account, discourages instinctive decisions
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Give 2 disadvantages of using decision trees
Difficult to get accurate data, probabilities are often uncertain, management bias can be introduced, change may affect accuracy
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Define opportunity cost
The cost of missing out on the next best alternative when making a decision
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Two ways in which you can decide between opportunities
Considering potential sales, cash requirements, deciding whether time is right, if the skills needed fit your own
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Give an example of when one factor has to be traded off against another
Starting a business/gap year, trading off the thing you like/what is most profitable, time today/time tomorrow
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What is a stakeholder?
An individual or group that has an effect on, and is affected by, the activities of an organisation
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Who came up with stakeholder mapping?
Mendelow
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What does stakeholder mapping show?
The power of a stakeholder vs stakeholder interest
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Give 3 influences on stakeholder relationships
Personal conviction (manager's own ideas, shareholders first), financial pressure (looking to survive, cost cutting) and labour market (labour markets make looking after staff more important)
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What is a pressure group?
A group seeking to influence government policy or business activity to secure the interests of their members/supporters
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What is a supply chain?
A system of organisations, people, activities, information and resources involved in moving a product or service from supplier to customer
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Define social responsibility
An ethical framework that suggests an organisation or individual has an obligation to act for the benefit of society at large
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